Tuesday, 16 December 2014

High Octane - Industry Welcomes FDI Relaxation

Developers say that reinstating investor confidence and providing stable growth will be the factors that will boost FDI in the real estate sector.

It was being deliberated for a while and has finally happened. The reduction of built up area and reduction of capital amount investment is all set to infuse fresh lease of life into the real estate sector. The reduction of minimum built-up area to 20,000 sq meters from 50,000 sq meters and 50% reduction in capital investment to $ 5 million from $ 10 million is being seen as having an immense potential to double FDI inflows into housing and commercial real estate, hotels, and township projects in the next one year.

Prashant Solomon, managing director, Chintels India and member-Governing Council, Credai-NCR, says, “The relaxation in FDI norms, a stable government and an investment-friendly market have all made people very optimistic towards the Indian real estate market. Investors are looking forward to the new government's initiatives for implementation of infrastructure projects, rationalization of the tax scenario with respect to securities as well as commodities transaction tax, along with other reforms. The government's vision of smart cities and the absence of any restriction on buying any number of residential and commercial properties make the Indian real estate a lucrative investment option."

Pradeep Jain, chairman, Parsvnath Developers, says: “In order to attract more foreign investment in the construction and real estate sector this is a remarkable step.

We are thankful to the government for this move. The sector is reeling from an acute funding pressure. Foreign investment in real estate has also gone down in the last few years. Hence, this move has sent a positive signal for the real estate sector which will be shown in coming days. “ Dhiraj Jain, director, Mahagun Group, says, “Inflow of FDI will help developers carry on the projects in a time-bound manner and boost the industry."

Source: Times Property, Dec 13, 2014

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